Canada: Headline inflation firmed to 1.9% in March - TDS

Analysts at TD Securities note that the Canada’s headline inflation firmed to 1.9% in March, matching market expectations, but the bigger story was a pickup in core inflation measures which firmed to 1.97% y/y on average following upward revisions to February.

Key Quotes

“We would fade the move in core CPI, as it was largely attributable to base-effects and is unlikely to be repeated going forward. Moreover, the growth outlook remains relatively muted especially after a sharp drop in real exports for February.”

“FX: The loonie took its cue from the beat on the core measures with a knee-jerk lower although the poor local backdrop should keep USDCAD contained to the 1.32-1.36 range.”